India Cuts South American Soybean Oil Imports, Opening Wider Room for Palm Oil Demand

As reported by citing Bloomberg on Saturday (24/1/2026), India has cancelled soybean oil shipments from Brazil and Argentina totaling 35,000–40,000 tons, previously ordered for February deliveries as well as the April–July period. Total cancellations are estimated to potentially exceed 50,000 tons.

The information was shared by Aashish Acharya, Vice President of Patanjali Foods Ltd., one of India’s largest vegetable oil buyers. Several other traders contacted by Bloomberg also confirmed the cancellations.

Cancellations Resume After December

The latest cancellations add to similar actions recorded in December, when Indian buyers reportedly backed out of more than 100,000 tons of Argentine soybean oil contracts—equal to around 20% of India’s monthly vegetable oil imports.

India remains highly dependent on imports, as roughly 60% of the country’s edible oil consumption is supplied through overseas purchases.

According to Acharya, the combination of a weaker rupee and rising global prices has pushed South American soybean oil to trade US$25–US$30 per ton higher than local supply.

With the cost gap widening, imports have become less economical, driving buyers to “cash out” and cancel shipments. At the same time, attention is shifting toward tropical vegetable oils, which are considered more attractive due to discounted pricing.

Bloomberg data also showed soybean oil’s premium over palm oil has increased sharply. The price gap has reportedly doubled since the start of the year, with soybean oil trading at a premium of around US$145 per ton over palm oil.

China’s Buying Tightens Supply

Supply-side factors have also contributed to price pressure. South American soybean oil supplies were reported to be tightening as China increased soybean purchases, reducing available raw materials for crushing into soybean oil.

Bloomberg also noted that Argentine soybean oil prices for near-term shipment climbed to their highest level in more than a year, based on Commodity3 data.

Palm Oil Outlook Strengthens

The rise in global soybean oil prices has not been fully reflected in India’s domestic market, as the weaker rupee has kept local pricing from moving in parallel. This mismatch is expected to encourage further soybean oil import cancellations and create more room for palm oil imports.

“This mismatch could trigger more cancellations of soybean oil purchases and increase palm oil imports,” said Mayur Toshniwal, President and Head of Trading at Emami Agrotech Ltd., an edible oil processor and biodiesel producer in India, as quoted by Bloomberg.

The development is seen as an important signal for the global vegetable oil market. As soybean oil import costs climb, palm oil may regain its position as a key option for price-sensitive markets such as India—one of the most strategic destinations for global palm oil exports.